Patent Docs

FWP IP ApS v. Biogen MA, Inc. (Fed. Cir. 2018)

November 19, 2018

By Donald Zuhn –-

Last month, in FWP IP ApS v. Biogen MA, Inc., the Federal Circuit affirmed a decision by the U.S. Patent and Trademark Office's Patent Trial and Appeal Board granting Biogen's motion that FWP's U.S. Application No. 11/576,871 did not provide an adequate written description under 35 U.S.C. § 112 for claims directed to a method for treating multiple sclerosis. The MS treatment at dispute involves administering a specific daily dosage (480 mg) of fumarates, specifically dimethyl fumarate (DMF) and/or monomethyl fumarate (MMF), to a subject.

The appeal arose from an interference proceeding involving the above method for treating multiple sclerosis. U.S. Patent No. 8,399,514, owned by Biogen, describes and claims such a method. The '871 application, which was assigned to FWP by original Appellant Forward Pharma A/S after the appeal was docketed, discloses controlled release compositions of fumarates. In the interference proceeding, Forward argued that the '871 application describes the treatment method in dispute. Although the Board determined that the '871 application had an earlier priority date than the '514 patent, it granted Biogen's motion that the MS treatment method Forward sought to claim was not supported by an adequate written description.

The '871 application is a U.S. national phase filing of a PCT application that was filed on October 7, 2005, and which claims priority to a Danish patent application filed on October 8, 2004. The '514 patent claims priority to a U.S. provisional patent application filed on February 8, 2007. During prosecution of the '871 application, Forward cancelled all pending claims and added claims that closely tracked the claims that issued in the '514 patent. The Board declared an interference between the '871 application and '514 patent, designating Forward as the senior party with a constructive reduction to practice date of October 8, 2004.

Finding that the focus of the '871 application was on "controlled release fumarate compositions" and that "general teaching of applicability of the fumarates to [the] treatment of a variety of possible disease or conditions and the teaching of a broad range of possible dosages would not have conveyed possession or description of the specific treatment of MS that [Forward] now claims," the Board granted Biogen's motion that the claims of the '871 application were not supported by an adequate written description. The Board pointed to claim 69 of the '871 application as representative:

69. A method of treating a subject in need of treatment for multiple sclerosis comprising
(a) a therapeutically effective amount of dimethyl fumarate and
(b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate is about 480 mg per day.

Looking to claim 69, the Board distilled the claimed treatment method at issue into three limitations: (1) an MS treatment, (2) by oral administration of a therapeutically effective amount of DMF and/or MMF, at (3) a dosage of 480 mg per day. With respect to the first limitation, the Board determined that the '871 application lists over twenty diseases and conditions, that MS is not identified as a disease or condition of particular interest, and that the application instead focuses on psoriasis and conditions associated with psoriasis. Regarding the third limitation, the Board determined that while the 480 mg/day dosage is expressly mentioned in the specification, there "is no discussion that would guide one skilled in the art to treat MS with a therapeutically effective dose of 480 mg/day, or any other therapeutically effective dose within the ranges disclosed."

The Board also rejected Forward's arguments based on Snitzer v. Etzel, 465 F.2d 899 (CCPA 1972); Falkner v. Inglis, 448 F.3d 1357 (Fed. Cir. 2006); and Streck, Inc. v. Research & Diagnostic Sys., Inc., 665 F.3d 1269 (Fed. Cir. 2012). The Board determined that unlike the invention in Snitzer, Forward's case required the selection and combination of claim elements from more than a single limited list, and that unlike Falkner and Streck, the '871 application did not provide the blaze marks necessary to guide a skilled artisan to the claimed invention. The Board concluded that even though each required claim element is mentioned separately in the '871 application, the specification did not disclose the claimed invention in a manner that adequately describes the claimed MS treatment to a skilled artisan, and therefore, that the claims of the '871 application failed to meet the written description requirement.

On appeal, Forward argued that the interference count was disclosed in an up-scale table in the '871 application, which Forward argued (1) discloses a 480 mg/day dosage, (2) is reasonably directed at using DMF to treat the listed conditions, and (3) is linked to the treatment of MS. The up-scale table describes scaling up the daily dosage level of fumerates over a nine-week period, with the 480 mg/day dosage occurring during week seven, and is designed to minimize the side-effects of ingesting fumarates by increasing the dose gradually over time to allow the patient to acclimate. The Federal Circuit, however, stated that it was not persuaded by Forward's argument, and agreed with the Board that "the '871 application does not disclose the now-claimed MS treatment as a unified whole."

With respect to the 480 mg/day dosage, the Federal Circuit noted that this dosage is an interim dosage, and that Forward failed to present persuasive evidence as to why a skilled artisan would have understood the week seven interim dosage to be therapeutically effective. The Court also noted that Biogen's expert testified that because MS is a chronic disease, a skilled artisan would not have viewed a one week, interim dosage in the middle of a nine week up-scale schedule as an adequate treatment dosage, let alone one for a particular disease such as MS.

In affirming the Board's decision, the Federal Circuit stated that "[g]iven the brief references to MS and the lack of recognition of 480 mg/day as a therapeutically effective daily dosage, we agree with the Board’s finding that there 'is no discussion [in the '871 application] that would guide one skilled in the art to treat MS with a therapeutically effective dose of 480 mg/day. . . .'" The Court was also unpersuaded by Forward's attempt to use the prior art to supply the link between the therapeutically effective dose of 480 mg/day and MS, noting that "even if we allow Forward to rely on the prior art for establishing a prior, known link between MS and fumarates, the prior art does not teach the key limitation of the count: the 480 mg daily dosage."

The Federal Circuit also rejected Forward's argument that the original claims of the '871 application adequately describe the MS treatment that it was seeking to claim. According to the Court, "Forward's argument is premised on piecing together elements of several of the claims." In rejecting this argument, the Court explained that:

Th[e original] claims are mainly directed to controlled release compositions of numerous fumarates and pharmaceutically acceptable salts. Some claims recited numerous possible dosing schedules (claims 30–32) and dosages (claims 33–38). And others replicate the laundry list of diseases and conditions enumerated in the specification (claims 44 and 45). This large number of disease conditions, dosages, dosing schedules, active ingredients, pharmaceutical formulations for controlled release, and combinations thereof covered by the original claims detracts from Forward's argument that it possessed and invented the now-claimed, specific MS treatment. . . . Rather, what the scale of the claims demonstrate is that Forward possessed, as of the 2004 critical date, a mere wish for obtaining some type of fumarate formulation to treat any one of a number of diseases and conditions, one of which was MS, using almost any possible daily dosage.

Finding that "the '871 application does not disclose 480 mg of fumarates per day as a therapeutically effective dose for treating MS," the Federal Circuit determined that substantial evidence supported the Board's finding that the MS treatment Forward sought to claim was not supported by an adequate written description under 35 U.S.C. § 112. The Federal Circuit therefore affirmed the Board's decision.

FWP IP ApS v. Biogen MA, Inc. (Fed. Cir. 2018)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Wallach and Chen
Opinion by Circuit Judge Chen
Ancora Technologies, Inc. v. HTC America, Inc. (Fed. Cir. 2018)

November 18, 2018

By Michael Borella —

Ancora sued HTC in the Western District of Washington alleging infringement of U.S. Patent No. 6,411,941. HTC moved to dismiss the case, contending that the claims of the patent were ineligible under 35 U.S.C. § 101. The District Court granted HTC's motion. Ancora appealed to the Federal Circuit.

The '941 patent is directed to mechanisms for preventing a computer from running unlicensed software. While using license keys to control software was well-known at the time of the patent's earliest priority date (1998), the patent purports to do so in a rather unusual fashion (for that time).

Particularly, a key that uniquely identifies the computer that the software is installed upon is stored in read-only memory (ROM) of the computer's basic input / output system (BIOS). Thus, the key cannot be modified, removed, or hacked by users or applications without significant effort. Further, a record that is associated with the licensed software contains the names of the software, its vendor, and a number of licenses thereof. The record is stored in volatile BIOS memory, encrypted by the key. The software contains an unencrypted copy of the license record.

When the software is run, it is loaded into main memory, obtains a copy of the key, and performs encryption of its copy of the license record. If this matches the encrypted license record stored in the BIOS, the program is permitted to continue executing. Otherwise, the program is considered "unlicensed" and is either halted or run with reduced functionality.

This technique is different from how software licensing was previously enforced. Software-based licensing required storing licensing information on the computer's main non-volatile storage device (e.g., a hard drive). But this device was easily accessed and susceptible to hacking. Hardware-based licensing required use of a pluggable dongle, which was poorly suited to software that was downloaded rather than sold in stores.

Further, BIOS memory was typically used to store low-level bootstrapping code that assisted startup of the hardware and initiation of the operating system, not license verification data. Thus, the use of BIOS is unusual.

Claim 1 of the '941 patent was considered representative. It recites:

1. A method of restricting software operation within a license for use with a computer including an erasable, non-volatile memory area of a BIOS of the computer, and a volatile memory area; the method comprising the steps of:
    selecting a program residing in the volatile memory,
    using an agent to set up a verification structure in the erasable, non-volatile memory of the BIOS, the verification structure accommodating data that includes at least one license record,
    verifying the program using at least the verification structure from the erasable non-volatile memory of the BIOS, and
    acting on the program according to the verification.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101. One must first decide whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion. But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

The District Court viewed the claim as focused on "the abstract concept of selecting a program, verifying whether the program is licensed, and acting on the program according to the verification." The District Court was led to this conclusion because of the claim's breadth and that it did not recite "how usage of the BIOS to store the verification structure leads to an improvement in computer security." With part one of Alice complete, the District Court found the claim lacking under part two as well, writing: "specifying that the BIOS be used to house the verification structure [calls for nothing more than] storing data in the memory of a computer component that generally stores data." Since the District Court found the claim abstract and without an inventive concept, it entered judgment in favor of HTC.

On appeal, the Federal Circuit rapidly answered the patent-eligibility question in the positive. Relying on recent precedent, such as Finjan, Inc. v. Blue Coat System, Inc., the Court stated that "[i]mproving security—here, against a computer's unauthorized use of a program—can be a non-abstract computer-functionality improvement if done by a specific technique that departs from earlier approaches to solve a specific computer problem."

The Court went on to disagree with the District Court, noting that the claim does recite storing the verification structure in a section of BIOS with certain beneficial characteristics, which was asserted to be an unexpected technique at the time of invention. Thus, in the view of the Federal Circuit, the claim does not recite a mere desired outcome, but how to achieve this outcome. Further, the claim addressed a technological problem associated with computers — software license verification — rather than a business, mathematical, or financial problem.

Oddly, while still considering the claim under the first part of Alice, the Court made an analogy to BASCOM Global Internet Services v. AT&T Mobility. The latter case stands for the principle that an unconventional combination of well-known additional elements can make a claim patent-eligible under part two of the test. The Court seemed to do so in order to support its conclusion that the claim was directed to a technical improvement in computer functionality.

With claim 1 found to be non-abstract, the Court did not need to explicitly move on to part two. Thus, the Federal Circuit reversed the District Court, and found that the '941 patent met the requirements of § 101.

Ancora Technologies, Inc. v. HTC America, Inc. (Fed. Cir. 2018)
Panel: Circuit Judges Dyk, Wallach, and Taranto
Opinion by Ciurcuit Judge Taranto
Conference & CLE Calendar

November 18, 2018

November 20, 2018 – "Lessons From PTAB Full or Partial Denials to Avoid Institution of an IPR or Avoid a Denial" (Strafford) – 1:00 to 2:30 pm (EST)

November 27, 2018 – "Patent Claim and Specification Drafting and Prosecution — Avoiding Traps That Lead to Royalty Free Licensing of Patented Technology" (Strafford) – 1:00 to 2:30 pm (EST)

November 28, 2018 – "Ch-Ch-Changes: Updates to the PTAB's Patent Trial Practice Guide for AIA Proceedings" (Federal Circuit Bar Association PTAB/TTAB Committee) – 3:00 pm to 4:00 pm (EST)

December 3, 2018 – "Phillips Construction in PTAB Trials: Strategies for Petitioners and Patent Owners" (Federal Circuit Bar Association PTAB/TTAB Committee) – 3:00 pm to 4:00 pm (EST)
FCBA Webast on Phillips Construction in PTAB Trials

November 17, 2018

The Federal Circuit Bar Association (FCBA) PTAB/TTAB Committee will be offering a webcast entitled "Phillips Construction in PTAB Trials: Strategies for Petitioners and Patent Owners" on December 3, 2018 from 3:00 pm to 4:00 pm (EST). John D. Vandenberg of Klarquist Sparkman, LLP will moderate a panel consisting of Eldora Ellison of Sterne, Kessler, Goldstein & Fox P.L.L.C.; Justin Kriege of Kilpatrick Townsend & Stockton LLP; and Rubén H. Muñoz, of kin Gump Strauss Hauer & Feld LLP. The panel will discuss new strategies for petitioners and patent owners facing the same claim construction standard in the PTAB and district court, including new timing considerations, issue preclusion and judicial estoppel risks, dealing with "indefiniteness," stays of district court actions, and mandatory disclosures of earlier constructions.

The webinar is complimentary for FCBA members, $100 for government, academic, or retired practitioners, or $175 for private practitioners. Those interested in registering for the webcast, can do so here.
Webinar on Patent Claim and Specification Drafting

November 17, 2018

Strafford will be offering a webinar entitled "Patent Claim and Specification Drafting and Prosecution — Avoiding Traps That Lead to Royalty Free Licensing of Patented Technology" on November 27, 2018 from 1:00 to 2:30 pm (EST). Thomas L. Irving, Mark J. Feldstein, and Anthony M. Gutowski of Finnegan Henderson Farabow Garrett & Dunner will guide patent counsel on the impact of case law on daily U.S. patent practice, offer best practices of sound principles to prepare and prosecute patent applications to avoid traps for the unwary or careless claim terminology and untoward language in the specification, and also give real-world examples of "worst" practices that have led to the destruction of U.S. patent rights. The webinar will review the following issues:

• How can a single word in claim language lead to the demise of U.S. patent rights?
• How do Federal Circuit and PTAB decisions impact drafting claims and specifications?
• What steps can counsel take to avoid careless claim terminology?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
FCBA Webast on Updates to the PTAB’s Patent Trial Practice Guide

November 17, 2018

The Federal Circuit Bar Association (FCBA) PTAB/TTAB Committee will be offering a webcast entitled "Ch-Ch-Changes: Updates to the PTAB's Patent Trial Practice Guide for AIA Proceedings" on November 28, 2018 from 3:00 pm to 4:00 pm (EST). Russell E. Cass of Clark Hill PLC will moderate a panel consisting of David Cavanaugh of WilmerHale LLP, Eugene Goryunov of Kirkland & Ellis LLP, and Eldora Ellison of Sterne, Kessler, Goldstein & Fox P.L.L.C. The panel will discuss the changes made in the Trial Practice Guide, the implications of those changes, how those changes affect strategies for Petitioners and patent owners, and what further changes might be expected in the future.

The webinar is complimentary for FCBA members, $100 for government, academic, or retired practitioners, or $175 for private practitioners. Those interested in registering for the webcast, can do so here.
Webinar on Lessons From PTAB Full or Partial Denials

November 17, 2018

Strafford will be offering a webinar entitled "Lessons From PTAB Full or Partial Denials to Avoid Institution of an IPR or Avoid a Denial" on November 20, 2018 from 1:00 to 2:30 pm (EST). Thomas L. Irving, Joshua L. Goldberg, and Cory C. Bell of Finnegan Henderson Farabow Garrett & Dunner will provide patent counsel with an analysis of the ever-increasing number of Patent Trial and Appeal Board (PTAB) denials and partial denials and offer take-home lessons applicable in practitioners' daily practice. The webinar will review the following issues:

• How can practitioners use the lessons of the PTAB denials to learn what patent owners are doing to achieve their ultimate success: An IPR petition denial?
• What can petitioners learn from the partially denied IPR institution decisions?
• How can practitioners prosecute applications and claims to enhance the likelihood of denial of IPRs and PGR petitions?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
CyWee Group Ltd. v. Samsung Electronics Co. (E.D. Tex. 2018)

November 13, 2018

Claims for Determining an Orientation of a 3D Pointing Device Using Sensor Data Found to be Patent-Eligible

By James Korenchan —

Plaintiff CyWee Group Ltd. ("CyWee") sued Defendants Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. (collectively, "Samsung"), asserting various claims of U.S. Patent No. 8,441,438 (the '438 patent) and U.S. Patent No. 8,552,978 (the '978 patent) (a child of the '438 patent). Samsung responded with a motion for summary judgment of invalidity of all asserted claims under 35 U.S.C. § 101. Last week, Circuit Judge William C. Bryson (sitting by designation in the Eastern District of Texas) denied the motion.

The claims of the asserted patents generally involve using a particular combination of sensors of a "3D pointing device" to gather raw data points representative of a position of the device, and then inputting those data points into a mathematical formula to determine an orientation of the device in a spatial reference frame. As an example, a 3D pointing device can be a mouse or other controller used to play video games such that, when a user moves the device, a pointer on the screen moves along with the orientation of the device.

Claim 1 of the '438 patent is representative of the four asserted apparatus claims of the '438 patent:

1. A three-dimensional (3D) pointing device subject to movements and rotations in dynamic environments, comprising:
    a housing associated with said movements and rotations of the 3D pointing device in a spatial pointer reference frame;
    a printed circuit board (PCB) enclosed by the housing;
    a six-axis motion sensor module attached to the PCB, comprising a rotation sensor for detecting and generating a first signal set comprising angular velocities ω_x, ω_y, ω_zassociated with said movements and rotations of the 3D pointing device in the spatial pointer reference frame, an accelerometer for detecting and generating a second signal set comprising axial accelerations Ax, Ay, Az associated with said movements and rotations of the 3D pointing device in the spatial pointer reference frame; and
    a processing and transmitting module, comprising a data transmitting unit electrically connected to the six-axis motion sensor module for transmitting said first and second signal sets thereof and a computing processor for receiving and calculating said first and second signal sets from the data transmitting unit, communicating with the six-axis motion sensor module to calculate a resulting deviation comprising resultant angles in said spatial pointer reference frame by utilizing a comparison to compare the first signal set with the second signal set whereby said resultant angles in the spatial pointer reference frame of the resulting deviation of the six-axis motion sensor module of the 3D pointing device are obtained under said dynamic environments, wherein the comparison utilized by the processing and transmitting module further comprises an update program to obtain an updated state based on a previous state associated with said first signal set and a measured state associated with said second signal set; wherein the measured state includes a measurement of said second signal set and a predicted measurement obtained based on the first signal set without using any derivatives of the first signal set.

Claim 14 of the '438 patent is representative of the five asserted method claims of the '438 patent:

14. A method for obtaining a resulting deviation including resultant angles in a spatial pointer reference frame of a three-dimensional (3D) pointing device utilizing a six-axis motion sensor module therein and subject to movements and rotations in dynamic environments in said spatial pointer reference frame, comprising the steps of:
    obtaining a previous state of the six-axis motion sensor module; wherein the previous state includes an initial-value set associated with previous angular velocities gained from the motion sensor signals of the six-axis motion sensor module at a previous time T−1;
    obtaining a current state of the six-axis motion sensor module by obtaining measured angular velocities ω_x, ω_y, ω_zgained from the motion sensor signals of the six-axis motion sensor module at a current time T;
    obtaining a measured state of the six-axis motion sensor module by obtaining measured axial accelerations Ax, Ay, Az gained from the motion sensor signals of the six-axis motion sensor module at the current time T and calculating predicted axial accelerations Ax′, Ay′, Az′ based on the measured angular velocities ω_x, ω_y, ω_zof the current state of the six-axis motion sensor module without using any derivatives of the measured angular velocities ωx, ωy, ωz; said current state of the six-axis motion sensor module is a second quaternion with respect to said current time T; comparing the second quaternion in relation to the measured angular velocities ω_x, ω_y, ω_zof the current state at current time T with the measured axial accelerations Ax, Ay, Az and the predicted axial accelerations Ax′, Ay′, Az′ also at current time T;
    obtaining an updated state of the six-axis motion sensor module by comparing the current state with the measured state of the six-axis motion sensor module; and
    calculating and converting the updated state of the six axis motion sensor module to said resulting deviation comprising said resultant angles in said spatial pointer reference frame of the 3D pointing device.

And claim 10 of the '978 patent is representative of the two asserted method claims of the '978 patent:

10. A method for compensating rotations of a 3D pointing device, comprising:
    generating an orientation output associated with an orientation of the 3D pointing device associated with three coordinate axes of a global reference frame associated with Earth;
    generating a first signal set comprising axial accelerations associated with movements and rotations of the 3D pointing device in the spatial reference frame;
    generating a second signal set associated with Earth's magnetism; generating the orientation output based on the first signal set, the second signal set and the rotation output or based on the first signal set and the second signal set;
    generating a rotation output associated with a rotation of the 3D pointing device associated with three coordinate axes of a spatial reference frame associated with the 3D pointing device; and
    using the orientation output and the rotation output to generate a transformed output associated with a fixed reference frame associated with a display device, wherein the orientation output and the rotation output is generated by a nine-axis motion sensor module; obtaining one or more resultant deviation including a plurality of deviation angles using a plurality of measured magnetisms Mx, My, Mz and a plurality of predicted magnetism Mx′, My′ and Mz′ for the second signal set.

Samsung contended that these claims are directed to a mathematical formula and thus patent-ineligible. In doing so, Samsung attempted to analogize these claims to those in Parker v. Flook and Digitech, and to distinguish these claims to those in Thales Visionix. In Flook, the Supreme Court found that claims for merely providing an equation into which selected temperature values were inserted were patent-ineligible. In Digitech, the Federal Circuit found that claims "recit[ing] a process of taking two data sets and combining them into a single data set" were directed to an abstract idea and thus patent-ineligible. And in Thales, the Federal Circuit found that the claims at issue, despite involving a mathematical equation, were "directed to systems and methods that use inertial sensors in a non-conventional manner to reduce errors in measuring the relative position and orientation of a moving object on a moving reference frame" and were thus patent-eligible.

Addressing step one of the Alice test, the Court began its analysis by opining on the importance and patentability of mathematical formulas:

Mathematical formulas, operations, or algorithms are at the heart of countless inventions; the application of mathematical principles has been the key to advancements in any number of fields. Just considering fields akin to the orientation – sensing devices and methods at issue in this case, mathematical algorithms are at the heart of such inventions as driverless vehicles, drone navigation, and the remote orientation of satellites and scientific instrumentation in space. The mathematical processes used in the operation of such devices have consequences in the physical world that make those devices precisely the kinds of inventions that the patent system was designed to protect and encourage. Moreover, improvements in such devices are patentable even when the improvements in the devices are the product of improvements in the sophistication of the algorithms that drive the product's performance. For example, autonomous emergency braking systems in automobiles have evolved through the use of more and more sophisticated algorithms, even when the brakes themselves and the sensors used to detect collisions may not have evolved significantly. An improved system for autonomous emergency braking could hardly be deemed unpatentable if it used an algorithm that was more sophisticated than its predecessors, even though the mechanical components were themselves known in the art.

The Court also stressed that mathematical equations involved in claims should be viewed in conjunction with all other claim elements.

With this in mind, the Court found that the '438 patent and '978 patent claims "entail more than simply performing a calculation or organizing information through mathematical correlations, as in Flook and Digitech." In particular, the Court highlighted the 3D pointing device and the computations performed by the processing/transmitting module based on the signal sets from the six-axis motion sensor module from the apparatus claims of the '438 patent, concluding that those claims are "directed to a particular device that performs a specific, useful function in the physical world" and "recite tangible, physical results from the receipt and assessment of information." As for the method claims recited in both patents, the Court concluded that the claims "do not simply describe a mathematical calculation" and are rather "directed to a means of using the inputs from six-axis and nine-axis sensors to track the orientation status of the 3D pointing device and correct errors associated with conventional motion detectors."

Lastly, the Court specifically addressed Samsung's argument that, unlike the inertial sensors in Thales, the present claims involve sensors being used in a conventional manner and are thus patent-ineligible. The Court refuted this argument, stating that the Thales Court did not view the unconventional use of the inertial sensors to be critical to the patentability of the subject matter. Rather, the Court asserted that the Thales court viewed this unconventional use merely as "additional evidence that the claims were not directed to an abstraction in the form of a pure mathematical formula, but instead to a new and useful technique that simply relied heavily on an algorithm for its effectiveness."

Thus, the Court found the claims of both the '438 patent and the '978 patent to be patent-eligible.

CyWee Group Ltd. v. Samsung Electronics Co. (E.D. Tex. 2018)
Memorandum Opinion and Order by Circuit Judge Bryson
USPTO Establishes Interim Procedure for Reconsideration of PTA Determinations Based on Submission of IDS Safe Harbor Statements

November 12, 2018

By Donald Zuhn –-

In a Notification published in the Federal Register earlier this month (83 Fed. Reg. 55102), the U.S. Patent and Trademark Office announced the implementation of an interim procedure for patentees to request recalculation of Patent Term Adjustment (PTA) determinations for alleged errors due to the Office's failure to recognize that an Information Disclosure Statement (IDS) was accompanied by a safe harbor statement. The Office also announced the provision of a new form for applicants to use when making a safe harbor statement.

The interim procedure and new form address an issue with the computer program that the Office uses to make initial PTA determinations, which currently does not recognize when an applicant has filed an IDS concurrently with a safe harbor statement. According to the Notification, the interim procedure will remain in effect until the Office can update the PTA computer program and provide notice to the public that the computer program has been updated.

Pursuant to 37 C.F.R. § 1.704(d), an IDS that is not accompanied by a safe harbor statement will result in a reduction of PTA if the IDS is filed after a Notice of Allowance or after an initial reply by the applicant, is filed as a preliminary paper or paper after a decision by the Board or Federal court that requires the USPTO to issue a supplemental Office action, or constitutes the sole submission for a Request for Continued Examination after a Notice of Allowance has been mailed. According to the Notification, a proper safe harbor statement under 37 C.F.R. § 1.704(d):

[M]ust state that each item of information contained in the information disclosure statement: (1) Was first cited in any communication from a patent office in a counterpart foreign or international application or from the USPTO, and this communication was not received by any individual designated in 37 CFR 1.56(c) more than thirty days prior to the filing of the information disclosure statement (37 CFR 1.704(d)(1)(i)); or (2) is a communication that was issued by a patent office in a counterpart foreign or international application or by the USPTO, and this communication was not received by any individual designated in 37 CFR 1.56(c) more than thirty days prior to the filing of the information disclosure statement (37 CFR 1.704(d)(1)(ii)).

Under the interim procedure being implemented by the Office, a request for recalculation of a PTA determination can be made by submitting a "Request for Reconsideration of Patent Term Adjustment in View of Safe Harbor Statement Under 37 CFR 1.704(d)" form (PTO/SB/134) in lieu of the request and fee set forth in 37 C.F.R. § 1.705(b). The above form must be submitted within the time period set forth in 37 C.F.R. § 1.705(b), which may be extended under the provisions of 37 C.F.R. § 1.136(a) (any extension fees, however, will not be waived under the interim procedure). The Notification points out that patentees will be given one opportunity to respond to any recalculation carried out under the interim procedure, and that such response must be filed within two months of the mail date of the recalculation, with no availability of extensions of time.

In addition to the interim procedure, the Office has also created a new form for submitting an IDS with a safe harbor statement. According to the Notification, Applicants who submit a "Patent Term Adjustment Statement under 37 CFR 1.704(d)" form (PTO/SB/133) with an IDS will be considered to be making a proper safe harbor statement, and the filing will be reflected in the file record.

According to the Office's Notification, the interim procedure became effective on November 2, 2018. Questions regarding the Notification can be directed to Kery A. Fries, Senior Legal Advisor, Office of Patent Legal Administration, Office of Deputy Commissioner for Patent Examination Policy.
Arista Networks, Inc. v. Cisco Systems, Inc. (Fed. Cir. 2018)

November 11, 2018

AIA Post-grant Reviews Not Precluded by Assignor Estoppel

By Kevin E. Noonan —

On Friday, the Federal Circuit handed down its decision in Arista Networks, Inc. v. Cisco Systems, Inc., deciding that the Board had erred in certain of its determinations regarding Arista's inter partes review challenge to certain claims of Cisco's U.S. Patent No. 7,340,597 (for reasons discussed briefly below). More importantly, the Court affirmed the Patent Trial and Appeal Board's decision that the doctrine of assignor estoppel does not preclude institution of any of the various post-grant challenges to granted patents contained in the patent law revisions enacted under the Leahy-Smith America Invents Act (35 U.S.C. §§ 311-319, §§ 321-329, and 125 Stat. 329-31 (2011)).

The challenged claims of the '597 patent were directed to secured communications over computer networks. Claims 1 and 29 are representative according to the Court's opinion:

1. An apparatus comprising:
    a communications device comprising:
        a subsystem; and
        a logging module, coupled to said subsystem, and configured to detect a change to a configuration of said subsystem of said communications device, and communicate information regarding said change to said configuration of said subsystem of said communications device.

29. The communications device of claim 1, wherein the logging module is configured to communicate the change to the configuration of the subsystem by broadcasting the change to the con- figuration of the subsystem.

As explained in the opinion:

In one embodiment, a network communications device includes a "logging module" that monitors and reports configuration changes. ['597 patent] at col. 3 ll. 43–48, col. 6 ll. 7–10. When the logging module detects a configuration change, it can indicate that change in various ways, for example, by way of "an indicator lamp, a message to a display, a message to another network device, broadcast message to specially-configured security devices, or other such mechanisms." Id. at col. 7 ll. 25–30.

In some embodiments, the logging module communicates a configuration change by "broadcast[ing] the change in the configuration of communications interface . . . to one or more security monitors on the network." Id. at col. 7 ll. 39–41; see also id. at col. 8 ll. 52–54. Such broadcasting occurs by way of a multicast address. Id. at col. 11 ll. 45–50. To monitor these broadcasts, in some embodiments, a given security monitor must "subscribe to this multicast address." Id. at col. 11 ll. 50–51, col. 13 ll. 57–67 (describing the process of configuring a security monitor, including "subscribing to a logging module's multicast address in order to receive broadcasts from the logging module").

The PTAB issued a Final Written Opinion invalidating claims 1, 14, 39-42, 71, 72, 84, and 85 as either being anticipated by the cited prior art or obvious. The Board held that Arista had not established by a preponderance of the evidence that claims 29, 63,64, 73, and 86 were invalid.

The Federal Circuit reversed and remanded this aspect of the PTAB's decision, in an opinion by Chief Judge Prost joined by Judges Schall and Chen. The issue before the Court in these cross-appeals hinged on the meaning of the term "broadcast" in the claims, and the panel held that neither of the competing interpretation of this term under the parties alternate claim construction was persuasive. The Court construed the terms "broadcast" and "broadcasting" de novo, and remanded to the Board to decide whether Arista had borne their burden of establishing invalidity (on either anticipation or obviousness) "in the first instance."

The more significant question considered by the panel was whether the Board erred in deciding that assignor estoppel did not preclude inter partes review of the challenged claims. "Assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent" explained the Court, citing Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374, 1377 (Fed. Cir. 1998), and (in present circumstances, perhaps more significantly) Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342, 349 (1924). As explained in the opinion, the named inventor of the '597 patent was employed by Cisco and assigned all right, title, and interest in the claimed invention to Cisco as a condition of his employment. This inventor later left Cisco and was part of the initial group that started Arista. Cisco challenged institution of the IPR on assignor estoppel grounds but the Board instituted the IPR in the face of this challenge. Accordingly, the first question the panel addressed was whether the decision to institute (and reject Cisco's assertion that the IPR should be barred under assignor estoppel) could be review by the Court under 35 U.S.C. § 314(d) as interpreted by the Supreme Court in Cuozzo Speed Technologies v. Lee, 136 S. Ct. 2131 (2016), and the Federal Circuit's application of this precedent in Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018) (en banc). This question turned on whether the issue of assignor estoppel was "closely related" to the decision to institute (in which case institution would not be reviewable under § 314(d)). But the opinion notes that the Supreme Court did not decide whether review was barred if the appeal "'implicate[s] constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond [§ 314(d)].'"

The Federal Circuit had addressed the issue of whether assignor estoppel could bar filing of an IPR, in Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., 838 F.3d 1236, 1241 (Fed. Cir. 2016), deciding that it would not. The panel acknowledged that the Court's intervening en banc decision in Wi-Fi One required additional analysis. The opinion focused on the further explication in Wi-Fi One that the "closely related" language in the Supreme Court's Cuozzo opinion was "tied to" the "reasonable likelihood" determination the Board must make under § 314(a). Under the Court's Wi-Fi One decision, the Supreme Court's Cuozzo opinion "strongly points toward unreviewability being limited to the Director's determinations closely related to the preliminary patentability determination or the exercise of discretion not to institute.'" Relying on this reasoning (in frank rejection of the panel opinion in Husky), the panel held that "it is clear that we may review the Board's decision as to whether § 311(a) contemplates application of assignor estoppel." This decision was bolstered, in the Court's opinion, by the question being more akin to the issue of the time-bar under § 315(b), which is "not focused on particular claims" and is "unrelated to the Director's preliminary patentability assessment or the Director's discretion not to initiate an IPR even if the threshold 'reasonable likelihood' is present."

Turning to the merits, the panel opined that this was an issue of statutory interpretation. The PTAB engaged in this exercise with regard to an earlier precedential decision of the Board that "§ 311(a) 'presents a clear expression of Congress's broad grant of the ability to challenge the patentability of patents through inter partes review,'" citing Athena Automation Ltd. v. Husky Injection Molding Sys. Ltd., IPR2013-00290, Paper 18 at 12–13 (P.T.A.B. Oct. 25, 2013)). The Board further supported its conclusion by noting that "Congress has not expressly provided for assignor estoppel in the IPR context, where it has in other contexts," citing Redline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, Paper 40 at 4 (P.T.A.B. Oct. 1, 2013)). Before the Court, Cisco had asserted assignor estoppel as "a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary." While finding "some merit" in this argument under Supreme Court's Westinghouse precedent, the panel noted that intervening decisions (in particular, Lear, Inc. v. Adkins, 395 U.S. 653, 664–66 (1969)) called the continued viability of assignor estoppel into question. Nevertheless, "'Congress is understood to legislate against a background of common-law adjudicatory principles,'" citing Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991), but that this presumption can be rebutted where "a statutory purpose to the contrary is evident," citing Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952).

That is the case here, in the Court's opinion. The panel based its decision on the language of § 311(a), which states that "a person who is not the owner of a patent" can file a petition for IPR. This language "leaves no room for assignor estoppel in the IPR context" according to the opinion (the panel agreeing with Arista's argument in this regard) and where, as here, the statutory language is "unambiguous" the Court is obliged to "enforce it according to its terms," citing King v. Burwell, 135 S. Ct. 2480, 2489 (2015). The panel expressly rejected Cisco's argument that not applying assignor estoppel in the IPR context was inconsistent with its availability as a defense before a district court or the International Trade Commission that could result in "forum shopping," saying that this outcome was "an intentional congressional choice":

Such a discrepancy between forums—one that follows from the language of the respective statutes—is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S. Ct. at 2144 ("[I]nter partes review helps protect the public's 'paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945)).

The panel also viewed this argument as being grounded in policy, which is more appropriately directed to Congress than to the Court.

While this interpretation of the statute is consistent with (and supported by ample citation to) Supreme Court precedent and proclivities, the Court's penchant for weighing in on statutory interpretation questions involving the AIA make it certainly possible that this decision might also come under Supreme Court review. It is less likely that the Court would disagree with the Federal Circuit's decision here but may be tempted to put its imprimatur on this aspect of the proper statutory interpretation of the AIA.

Arista Networks, Inc. v. Cisco Systems, Inc. (Fed. Cir. 2018)
Panel: Chief Judge prost and Circuit Judges Schall and Chen
Opinion by Chief Judge Prost

recent posts

about